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Malaysia’s RON95 petrol subsidy cuts in doubt after voters punish Anwar over diesel reforms
- Analysts warn a by-election loss in Penang signals Anwar Ibrahim’s government could face a ‘huge backlash’ if it pushes through further cuts
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Malaysia’s plans to slash petrol subsidies risk being derailed after the government suffered a punishing loss in a state by-election over the weekend – and as consumers grapple with persistently high living costs linked to other recent subsidy cuts.
Voters in Sungai Bakap sent a clear message of discontent with Prime Minister Anwar Ibrahim’s economic policies, with the Islamist opposition party PAS retaining the rural seat in northern Penang state by a commanding 4,200-vote majority on Saturday, despite tepid voter turnout.
Experts say the result is the strongest sign yet that the decision to replace blanket diesel subsidies with a targeted system has done little to ease the financial burden facing Malaysians, even with government assurances.
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Bridget Welsh, an honorary research associate with the University of Nottingham’s Asia Research Institute in Malaysia, said the subsidy cuts and economy clearly mattered to voters – as did how the cuts were implemented “without stakeholder engagement or appreciation of the negative impact on middle-class voters”.
Malaysia’s uneven pandemic recovery has left millions of private-sector workers dipping into their retirement savings to cover living expenses, after changes to the country’s mandatory savings fund allowed billions of ringgit to be withdrawn in a matter of weeks.
The government has faced accusations of failing to rein in prices, which the opposition say was exacerbated by cuts to subsidies for utilities, chicken, and most recently, the removal of broad diesel subsidies.
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